The city’s lawsuit over what’s been termed a “disastrous deal” in how it funded pensions in 2005 and 2006 — a description levied with the benefit of 20-20 hindsight — is the subject of a court-ordered mediation session today.

Chief U.S. District Judge Gerald Rosen, also the head mediator in the city’s bankruptcy case, issued an order to the city, several insurers and the banks that financed the “Certificates of Participation” (COPs) for the city’s two pension funds. Attorneys are to appear at noon today to discuss the deal, which provided about $1.8 billion for Detroit’s two pension funds under terms that later became unaffordable for the city.

Judge Rosen is considered the chief architect of the “grand bargain,” the “swaps settlement” and has led talks between the city and employee groups in reaching settlements in the bankruptcy case. Judge Rhodes has repeatedly encouraged attorneys for the city and its creditors to keep discussing settlements in advance of the Aug. 14 bankruptcy trial.

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